There are all types of people, such as lazy employees, students, and teenagers, including lazy lawyers and bank employees. Recent news reports describe details of slowdowns in the foreclosure arena. The recent slowdown in foreclosures is due to faulty documents, and robo-signing. A robo-signer is an employee that signs loan or foreclosure documents without actually reviewing the documents in detail. Robo-signers assume that the documents are accurate; therefore, sign without reviewing. As a consequence, this situation is causing lenders to stop the foreclosure process on thousands of loans. Lenders have temporarily stopped issuing late notices and referring default cases to attorneys for foreclosure.
The result is confusion among borrowers. At the same time, in the court house, judges are angered by confusion in the legal documents filed in foreclosure cases. For example, in some robo-sign cases the allegations are that one person, on behalf of the lender, using a fake name signed hundreds of documents a day without any review. In other cases, there are allegations that attorneys filed documents in foreclosure cases without proper review.
As a result, there has been a decrease in houses in foreclosure. Thousands of late notices have not been sent by lenders; stalling the foreclosure process in many jurisdictions. As reported in The Wall Street Journal, many
foreclosures cases already filed in various courts are stuck in limbo, while judges try to sort out documentation. This mess continues to spread delays causing great confusion for homeowners and stalling the foreclosures process in many states. Due to the mess, late bills are stacking up for homeowners looking for
loan modifications.
For instance, as reported in The Wall Street Journal, major problems are occurring in Florida. The Stern Law Firm which has taken more than they can bargain for is undergoing investigations by Florida's attorney general, that the firm has made improper filings of documentation. The firm rejects any accusation of wrong doing and plan to demonstrate otherwise. In fact, the previous cases that The Stern Law Firm was engaged in have been transferred to other firms. As mentioned by The Wall Street Journal, one client, Lisa Butterfield, had hopes in finally having her foreclosure situation resolved with a deed-in-lieu of foreclosure. Unfortunately, she continues to pay the properties utilities hoping to reach a deal with GMAC.
On the other hand, lawyers put the blame on lenders for the foreclosure mess. The Federal National Mortgage Association has transferred various cases to different law firms. Judge Blanc, in Florida, has also started holding hearings to relocate the cases. Judge Blanc said cases will be dismissed if no one appears on behalf of the banks. If that occurs banks would have to start from scratch. Some law firms have even suspended their practice because of the unfortunate circumstances.
Meanwhile, bills continue to pile up for homeowners due to the robo-signing of lenders and attorneys. Bankruptcy attorneys anticipate lenders will try to catch up with defaulted mortgages by issuing thousands of late notices at once, resulting in thousands of panicked homeowners searching for answers to potential loss of their homes. This situation could snow-ball into mass
foreclosure actions, clogging court systems and bankruptcy courts.
Chapter 13 Bankruptcy can stop a foreclosure action and allow you to keep your home. If you want to learn about your options to stop foreclosure consult your
Maryland Bankruptcy Attorney,
Baltimore Bankruptcy Attorney or
Montgomery County Bankruptcy Attorney.